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Using a credit card in Canada
You love using your credit card here in the States — but can you use it in Canada?
Before taking your card to Canada, however, there are a few things you should know: fees, how to keep your card safe, where to get cash and more.
Compare credit cards for use in Canada
A common benefit of travel cards is their lack of foreign transaction fees. This means that you won’t have to worry about paying a fee every time you use your card while traveling. Although foreign transaction fees are often small, they can add up quickly over the course of a trip.
A few credit card fees to avoid
Though Canada is just a hop and a skip across the border, your spending there is still subject to international fees. In particular, you’ll want to avoid foreign transaction fees and currency conversion fees.
Foreign transaction fees
A foreign transaction fee is assessed when you use your card abroad, and it’s usually 3% of each transaction (though can be more, depending on your card).
Most credit cards have foreign transaction fees. However, all good travel cards come with no foreign transaction fees. For a few excellent cards, look into the Chase Sapphire Preferred® Card, PenFed Pathfinder Rewards American Express® Card and BankAmericard Travel Rewards.
Currency conversion fees
A merchant may offer to convert your bill into US dollars instead of charging you in Canadian dollars. This is called dynamic currency conversion, and it’s expensive because you’ll pay a currency conversion fee for it. If a merchant offers it, take a hard pass.
Which credit card issuers are accepted in Canada?
Should I use my credit card to get cash?
Though you can likely use your credit card everywhere you go in Canada, you may need to get cash at some point. Unfortunately, it can be very expensive to get cash from your credit card. That’s because your card provider will charge you a cash advance fee as well as a higher interest rate for cash advances.
Check out this card’s pricing information table. As you can see, the cash advance APR is 25.74%, which is higher than the APR you’ll get for purchases or balance transfers.
Not only that, but you’ll see that a cash advance comes with a high fee. At a minimum, you’ll pay $10. But you might pay more because the fee is the greater of $10 or 5% of your transaction. If you take out a $300 cash advance, for example, you’ll pay the 5% fee — that’s $15.
Of course, credit-card ATM withdrawals may also be subject to foreign transaction fees. The implication is clear: Don’t use your credit card at ATMs.
Pick up a no-fee debit or ATM card instead
Instead of relying on your credit card to get cash, look for a low-fee debit or ATM card.
The debit card from the Schwab Bank High Yield Investor Checking Account is one excellent pick. It reimburses you for any fees you may incur at ATMs. And because it’s not a credit card, you won’t have to worry about cash advance interest.
Even better, the card doesn’t charge foreign transaction fees. That means you can avoid the 1% to 3% fee that credit and debit cards often charge.
Magnetic stripe and chip credit cards
Over the past few years, your card providers have probably upgraded your existing credit cards to one with a chip inside. These cards are called, unsurprisingly, chip cards.
In the United States, we mostly have chip-and-signature cards — you must provide a signature during a transaction to verify your identity. Meanwhile, in Canada chip-and-PIN cards are standard. With this type of card, you enter a four-digit personal identification number to verify your identity.
Can I use my chip-and-signature card in Canada?
You’re not out of luck if you only have a chip-and-signature card. If you don’t have a PIN, Canadian point-of-sale systems will ask you to provide a signature to complete each transaction.
If you’d like, you can turn your card into a hybrid signature/PIN card — just ask your provider for a PIN.
Alternatively, you can pick up an actual chip-and-PIN card. Two such cards often recommended by travelers are the State Department Federal Credit Union Visa Platinum and the Andrews Federal Credit Union Visa.
What if I don’t have a chip card at all?
If you’re stuck with a magstripe card, you’ll likely be fine in Canada — card machines often allow swiping. Regardless, consider calling your provider to get a chip card. This type of card is generally considered more secure than magstripe cards, and it’s already standard around the world.
Is it safe to use my credit card in Canada?
For the most part, you’re quite safe from credit card fraud in Canada. You’ll rarely be on the hook for fraudulent transactions. Even if you owe money, US law states you can only be charged a maximum of $50.
As with all destinations, however, there’s the possibility your credit card information could be stolen. Here are a few ways to avoid it.
- Keep your PIN safe. Whenever you enter your PIN, use your other hand to cover your inputs. This helps cut down on spying — both from hidden cameras and people looking over your shoulder.
- Be careful about which ATMs you use. Avoid decrepit ATMs and ATMs in isolated locations. Instead, use ATMs attached to banks.
- Cancel your ATM transaction if anything seems awry. Don’t use an ATM if your card doesn’t slide smoothly into the card slot, or if the keypad is difficult to press. The machine may be compromised by a credit card skimmer — a device that steals credit card information.
Keeping your credit card (physically) safe
Thieves don’t just steal credit card information by recording your card number — they can also steal the card itself.
Pickpocketing isn’t a huge problem in Canada — certainly not as big of a problem as it is in Europe. However, it’s still a good idea to remain vigilant, especially in larger cities. Keep your belongings close, even if you’re in a supposedly safe place like a restaurant.
To decrease the chances your credit card will be stolen, consider keeping it in a money belt. This is a fabric pouch that you wear around your waist and hide under your shirt or in your pants. Also, consider neck pouches, hidden pockets or a belt with hidden pockets.
How should I prepare before my trip?
Before heading to Canada, ensure that you can use your credit card with no problems.
1. Get a credit card with no foreign transaction fees. Foreign transaction fees can be a downer on vacation, but they’re easy to avoid if you pick the right card.
2. Highly consider getting a Visa or Mastercard. Visa and Mastercard are the most widely accepted cards in Canada. You can use American Express at some locations, but many other merchants won’t take it. If you have a Discover card, you might not be able to use it at all.
3. Give your card provider a heads-up. Your card company hates fraud because it loses them money. If they see a foreign transaction on your card, they may put a hold on your account for suspicious activity. To avoid this, let your provider know you’ll be traveling to Canada.
4. Know who to call if you have a problem with your card while traveling. Your card might be stolen while you’re traveling, or you could lose it. In both cases, you’ll need the right number to call for a replacement card.
5. Know where you’ll get cash once you arrive. So you don’t waste time, plan out beforehand where you’ll get cash. See if your bank has international partnerships that allow you to use some ATMs for free.
Before you travel to Canada, answers these questions:
- Which credit cards will I take? Consider taking at least two. Make sure they don’t have foreign transaction fees.
- Do I understand the fees I might encounter? Knowledge is power — and it can save you a lot of money on your travels.
- Have I called my card provider? Keep your card provider in the loop, and know what number you’ll call if you run into trouble abroad.
- What’s my plan for cash? Have a debit card ready, and know which ATMs you’ll get cash from.
Once you’ve made these arrangements, you’re all set to use your credit card on your next Canadian trip. Safe travels!
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